Equities Lead As June Inflows Top $77B

The ETF market missed the chance to breach the $500 billion inflow mark at the first half of the year, but appears well on the way after investors put $77 billion in the market in June.

The inflows last month are a 15% increase over May’s flows, and puts the industry on track to easily break the full-year record of $507.4 billion from 2020 in a matter of weeks. The first half of 2021 ended with $472.5 billion in assets for U.S.-based ETFs.

Let’s dig into the data.

Equities Just Keep Getting Bigger

U.S. equity funds added $37.7 billion in assets during the month, a 55% increase over May’s tally, while international equities gained $19.8 billion for a 13.7% gain month-over-month. The performance for American equities isn’t surprising considering the S&P 500 closed at record-highs 35 times in 2021 so far, while the tech-heavy Nasdaq Composite hit 18 records in the same period.

The Invesco QQQ Trust (QQQ) led the charge among all funds, with $6.16 billion in flows during the month as tech flourished, while the SPDR S&P 500 ETF Trust (SPY) was a distant second, at $4.9 billion.

On a year-to-date basis, U.S. equities have a net gain of $219.2 billion and just more than $3.8 trillion in assets under management, while international equities have gained $138 billion and stand at $1.3 trillion in total assets.

Inflation Fears Recede

As more Americans returned to something resembling a prepandemic normal, and other countries across the world started to emerge from COVID-19-generated lockdowns, some investors took positions in inflationary plays as a mismatch of demand and the Federal Reserve’s commitment at the time to keep rates near zero.

Those plays lost steam soon after multiple Fed governors suggested that rate hikes would begin as soon as next year after their FOMC meeting in June, implying that the central bank is keeping a closer eye on long-term inflation than it’s previously indicated.

The Vanguard Short-Term Bond ETF (BSV) and the SPDR Gold Trust (GLD) were among the top 10 gainers in May but fell off the list in June, while the iShares 1-3 Year Treasury Bond ETF (SHY) lost $845.1 million in the month.

At the same time, a $2.2 billion inflow into the iShares 20+ Year Treasury Bond ETF (TLT) and $2.6 billion into the iShares U.S. Real Estate ETF (IYR) suggest that investors aren’t too worried over longer-term inflation.

Commodities Slow Considerably

The commodities class showed a noticeable slowdown during the month despite posting net inflows of $460.2 million—well off the pace of the approximately $5.5 billion worth of inflows in May.

The asset class’ month is a tale of two extremes. Speculators drove the price of oil to almost $75 per barrel toward the end of the month as a wave of post-lockdown vacations piqued demand.

The United States Oil Fund LP (USO) had returns of 9.84% for the month, while the broader Energy Select Sector SPDR Fund (XLE) had a single-month of return of 2.91%.

However, precious metals retreated significantly as inflation fears eased. GLD, the iShares Gold Trust (IAU), the iShares Silver Trust (SLV) and the Aberdeen Standard Physical Precious Metals Basket Shares ETF (GLTR) all had negative returns of 7% or worse during the month.

For a full list of the top inflows and outflows for May and the year as a whole, see the tables below:

Top Gainers (June 2021)

Top Gainers (Year-to-Date)

Biggest Losers (June 2021)

Biggest Losers (Year-to-Date)

Asset Classes (June 2021)

Asset Classes (Year-to-Date)

June 2021 ETF Issuer League Table

Disclaimer: All data as of 6 a.m. Eastern time the date the article is published. Data is believed to be accurate; however, transient market data is often subject to subsequent revision and correction by the exchanges.